Second quarter economic growth likely recovered to around 7 percent, the Department of Finance (DOF) said, marking the return of the Philippines as one of Asia’s best performers after a disappointing showing at the start of the year.
DOF Undersecretary and chief economist Gil Beltran noted that manufacturing output numbers released last week were encouraging, saying they pointed to higher gross domestic product (GDP) growth in April to June.
“The rise in manufacturing growth foreshadows a possible return to 7-percent real growth in the second quarter,” Beltran said on Monday.
In the first quarter of 2014, the Philippine economy grew by just 5.7 percent, slower than analysts’ forecasts and below the state’s target range of 6.5 to 7.5 percent. The manufacturing sector, which accounts for about a fifth of domestic output, grew by just 4.3 percent during the same period.
Prospects have become rosier in recent months, Beltran said. The manufacturing sector grew by 13 percent in the second quarter. Sales were also about 50 percent higher, he added.
“This means that the sector continued to draw down from inventory as in the first quarter. Replenishment of supply is necessary soon to avoid price increases,” he said.
Compared to the first quarter, production output in the second quarter grew at almost three-fold while sales increased by 1.5 times.
Data on manufacturing output was released together with the state’s report on exports, which showed a growth of 21.3 percent in June, the fastest expansion so far this year.
Beltran’s assessment runs counter to recent forecasts that show growth likely remained weak in the second quarter due to slow state spending.
The International Monetary Fund (IMF) said it expected second quarter GDP to be slower than year-ago levels as the government hit bureaucratic bottlenecks that led to delays in the execution of its rehabilitation plan for Visayas.